Pause in troika review, many fronts open

Troika inspectors were due to leave Athens on Tuesday with little sign of a comprehensive deal with the Greek government over the latest adjustment program review in sight. The lack of progress means that a Greek delegation will head to Washington for talks with International Monetary Fund chief Christine Lagarde on Sunday.

There were the outlines of an agreement on a new payment plan for individuals and businesses with debts to the state as talks concluded on Tuesday but little sign of a deal on a range of other key issues, including the settlement of nonperforming loans.

From the Greek government’s point of view the IMF is being the least flexible member of the troika in the current talks. This has prompted plans for Finance Minister Gikas Hardouvelis, Bank of Greece Governor Yannis Stournaras and Prime Minister Antonis Samaras’s adviser Stavros Papastavrou to fly to the US to meet Lagarde. The delegation will be given the task of coming up with a formula that will help conclude the review swiftly once the troika returns to Athens in early November, after the European Central Bank has conducted its stress tests and the new European Commission has been sworn in.

The three Greek officials will also set out the government’s plan for exiting the bailout program at the end of this year, with more than a year of scheduled loan installments from the IMF to come.

As talks with the troika on Tuesday on the issue of nonperforming loans (NPLs) failed to produce a deal, the government is said to have shifted its attention to the problem of outstanding tax and social security debts and is expected to submit a draft bill in Parliament over the coming days with a plan to facilitate their repayment.

According to the blueprint, those with debts up to 15,000 euros will be allowed to repay them in up to 100 installments while those owing more than 15,000 euros will be permitted 72 installments.

As for the thorny issue of NPLs, sources admitted that the two sides had failed to reach an agreement but did not rule out the possibility of a solution being submitted to Parliament in a separate bill before early November when troika mission chiefs are due to return to Athens.

A proposal by Development Minister Nikos Dendias to tackle the NPL problem was not rejected out of hand, Kathimerini understands, but rather deemed to be inadequate. Troika auditors had asked for a comprehensive plan that would incorporate measures for settling both corporate and household debts. The blueprint presented by Dendias, however, only considered the debts of small and medium-sized businesses and the self-employed, not households. Dendias appeared irked at the deadlock, defending his “excellent piece of legislation.”

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